Natural Gas Price Prediction – Prices Slip as Warm Weather Perpetuates

Natural gas prices moved lower on Monday, as the forecast for the weather continues to show warmer than normal climate over the next 6-10 and 8-14 days according to the National Oceanic Atmospheric Administration. Hedge funds added to both long positions and short positions in futures and options according to the latest commitment of trader’s report. The supply of natural gas was lower in the latest week due to the decline in imports from Canada.

Technicals

Natural gas prices moved higher on Monday after closing down nearly 3% last week. Prices made a lower high and a lower low which his a sign of a downtrend. Support is seen near the 2016 lows at 1.61. Resistance to natural gas prices is seen near the 10-day moving average at 1.87. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram prints in the red with a declining trajectory which points to lower prices. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal, in oversold territory. The current reading on the fast stochastic is 3, well below the oversold trigger level of 20, which could foreshadow a correction.

The EIA reports that Supply is Lower

Supply is down as imports from Canada decline according to data from the EIA. The average total supply of natural gas fell by 1% compared with the previous report week. Dry natural gas production remained constant week over week. The average net imports from Canada decreased 9% from last week because of the lower demand for space heating in population centers in the Northeast and Midwest.